EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844528
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Jaylon Industries applied for a TCO in respect of certain geomembranes on 18 December 2008.
Instrument
TCO No 0844528 was made on 13 March 2009. It declares that those certain geomembranes are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0844528 is taken to have come into force on 18 December 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the imposition and collection of customs duty on imported goods. One of the gaps addressed by this legislation is the ability to provide tariff concessions on certain goods, thereby encouraging the importation of goods that are not produced domestically. The Tariff Concession Instrument No. 0844528 was introduced to provide a concession on certain geomembranes, specifically addressing the need to reduce the duty on these goods to foster their importation where no suitable Australian-made alternatives exist. The policy objective, as per the Act, is to ensure that a lower rate of customs duty applies to goods subject to a Tariff Concession Order (TCO) if no substitutable goods are produced in Australia in the ordinary course of business. The instrument was created following an application by Jaylon Industries and after satisfying the core criteria under section 269C of the Act, a TCO was issued by the Chief Executive Officer of Customs, making the concession effective from the date the application was lodged.
Scope and Application
The Customs Act 1901 applies to any individual or entity involved in the importation or exportation of goods within Australia, including businesses, importers, and exporters, by setting the legal framework for customs duties and other import/export regulations. Specifically, Part XVA of the Act provides the mechanism for Tariff Concession Orders (TCOs), which can be applied for by a person seeking a lower rate of customs duty on specified goods. The Act mandates that the Chief Executive Officer of Customs (CEO) must make a TCO if the application meets core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO's decision is subject to certain exclusions, particularly as outlined in section 269SJ of the Act, which lists goods ineligible for TCOs. Geographic jurisdiction for the Act is national, extending to all imports and exports within Australia, with the TCO affecting the rights of importers from the date the application is lodged. The application of the Act can be further detailed through subordinate instruments, which may provide additional specifications or exceptions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0844528 (F2009L01955) concern the process and criteria for granting Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269C). Specifically, section 269C requires that for a TCO application to meet the core criteria, no substitutable goods must be produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The definition of terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, they must issue a written TCO (section 269P(3)). For Jaylon Industries' application for certain geomembranes, the CEO determined that no substitutable goods were produced in Australia and subsequently issued TCO No. 0844528, which declared that these geomembranes would be subject to a duty-free rate (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations imposed by the Customs Act 1901 and the associated regulations on parties and entities governed by the Act include the requirement for the CEO to publish a notice in the Gazette inviting submissions from interested parties if a TCO application is accepted as valid (section 269K(1)). In this case, no submissions were received in response to the notice published for Jaylon Industries' application. Furthermore, the Act stipulates that the rights of persons other than the Commonwealth are not adversely affected by the registration of a TCO, and that no new liabilities are imposed (section 269S(1)). Importers benefit from this by being able to apply for a refund of duty on goods imported since the TCO came into force (Regulation 126(1)(r)).
In terms of offences, penalties, or civil/criminal consequences for breaches, the Act does not explicitly detail specific penalties for non-compliance with the TCO provisions. However, the general legal framework under which the Customs Act 1901 operates includes potential penalties for non-compliance with customs regulations. These may include fines and imprisonment, depending on the severity and intent of the breach. The specifics of these penalties are governed by other sections of the Customs Act and related legislation, which may impose significant financial penalties and imprisonment terms for serious offences.